Amenity Value of Proximity to National Wildlife Refuges

Timothy Hamilton

North Carolina State University

Camp Resources XVIII

National Wildlife Refuges

502 NWRs in the lower 48 states Operations = $362m, Maintenance =

$140m ~ 40 million visitors each year

Most open to public 70% have hiking/walking trails 60% have visitor facilities 50% open fishing and hunting 70% offer educational programs

Habitat conservation

Management Problem

NWR establishment removes land from the tax base.

FWS pays $1.65 per acre By comparison, Cape May refuge in NJ.

Average home value/acre implies $1,732 per acre in property tax revenue.

Management Problem

However, NWRs provide local communities benefits:

Ecological functions Recreation benefits to larger community Localized property value impacts

Proximity to NWR may increase value of nearby homes increases tax base

Quantification of these benefits continues to be a key challenge for federal agencies

Hedonic Valuation

There are dozens of hedonic estimates of the capitalization value of proximity to open space:

Permanent vs. agricultural and/or developable open space

Boyle, Paterson and Poor (2002); Neumann, Boyle and Bell (2009)

Case-study of four NWRs (one near an UA, two more remote)

Obtain transaction data Hedonic analysis of sales data to determine value of

proximity to NWR 4.8% increase for homes in the urbanized area;

significantly less for non-urbanized area.

Hedonic Valuation

Broader programmatic approach desired

Census Microdata offers an opportunity to consider broad geographic models

Davis (2011) Proximity to power plants Use census microdata across the U.S.

Rabindran and Timmins (2011) Proximity to superfund site Use both census and transaction data

Study Area

Begin with GIS of all NWR boundaries Overlay with GIS of all urbanized areas

(UA) Contiguous, densely settled census

blocks/groups that meet minimum population density requirements (1,000 people/sq.mile, 500 in surrounding blocks)

NWR boundary must be within two miles of the boundary of an UA (188)

8/7/11

Study Area, continued

Final sample must also have: NWR established in 1999 or earlier

Final Sample: 90 NWRs Northeast: 34 Southeast: 20

Link NWRs to Census Blocks

Census geography is defined as: Block: smallest geography available

Typically defined by geography Population taken into consideration

Census data links household to blocks

8/7/11

8/7/11

Proximity to an NWR Linear distance between census block

centroid and NWR boundary is measured

Each census survey is linked to the block in which the house is located

Housing Data

Confidential Census Data: decennial census long-form with block identifier

One-in-six sample of entire U.S. Housing characteristics

Housing type, age of structure, total # rooms, bedrooms, heating type, parcel size (<1, 1-9, >10 acres)

Housing value Owner-report, 24 categories.

Basic Model

Xi = housing/household characteristics Zb = block characteristics Kg = neighborhood/block group

characteristics Db = distance of block centroid to NWR

Fixed effects by NWR and tracts

))(,(ln ,,, , bgbigbi DdKZXfP

Model Covariates

Housing Characteristics # of rooms and bedrooms, lot size, age of

house Block Characteristics: GIS

Proximity of a block to: Nearest Interstate Highway Nearest national or state park Coastline Urbanized area boundary Centroid of the nearest MSA

Model Covariates

Other open space 2001 National Land Cover Database Based on satellite imagery in 30-meter pixels Calculate % of each census block in each land

classification calculated. 29 land use categories aggregated to:

% open water % developed open space % developed low, medium or high density % forest % shrub/grassland

Model Covariates

Neighborhood/Block Group Characteristics Population density Median family size Median number of children 18 and under Median number of adults over 65 Median household income % Owner occupied % Vacant for seasonal use % Single family detached % Apartment

Impact of Distance to NWR

Continuous Distance d(Db) = β1Db + β2(Db)2

Discrete Intervals d(Db) = β1I[0,.5] + β2I(.5,1] + β3I(1,1.5] + β4I(1.5,2] + β5I(2,2.5]

Omit dummy for block > 2.5 miles from NWR

NE Results

3 miles to NWR, 10 miles to UA

3 miles to NWR, 8 miles to UA

3 miles to NWR, 5 miles to UA

Distance -0.0430* -0.0744*** -0.141***

(0.0219) (0.0274) (0.0457)Distance^2 0.0132** 0.0209*** 0.0360***

(0.00639) (0.00802) (0.0132)

Observations 14,551 10,775 4,660

R-Squared .66 .63 .68

NE Results: Categorical Distance

3 miles to NWR, 10 miles to UA

3 miles to NWR, 8 miles

to UA

3 miles to NWR, 5 miles to UA

≤ 0.5 miles 0.0232 0.0365* 0.0976***

(0.0186) (0.0214) (0.0364)0.5 to 1.0 miles -0.0115 -0.0203 -0.00491

(0.0159) (0.0183) (0.0294)1.0 to 1.5 miles -0.0185 -0.0151 -0.0110

(0.0144) (0.0169) (0.0285)1.5 to 2.0 miles 0.00430 -0.00697 0.00919

(0.0128) (0.0150) (0.0242)2.0 to 2.5 miles -0.00986 -0.0180 -0.00562

(0.0105) (0.0125) (0.0193)

SE Results

3 miles to NWR, 10 miles to UA

3 miles to NWR, 8 miles to UA

3 miles to NWR, 5 miles to UA

Distance -0.171*** -0.186*** -0.221***

(0.0248) (0.0287) (0.0449)Distance^2 0.0442*** 0.0518*** 0.0569***

(0.00692) (0.00793) (0.0124)

Observations 18,134 13,926 6,970

R-Squared .57 .64 .61

SE Results: Categorical Distance

3 miles to NWR, 10 miles

to UA

3 miles to NWR, 8 miles to UA

3 miles to NWR, 5 miles to UA

≤ 0.5 miles 0.0874*** 0.0686*** 0.101***

(0.0206) (0.0239) (0.0350)0.5 to 1.0 miles 0.0171 -0.00862 0.0377

(0.0171) (0.0202) (0.0294)1.0 to 1.5 miles -0.00851 -0.0420** -0.0352

(0.0146) (0.0168) (0.0250)1.5 to 2.0 miles -0.0193 -0.0375*** -0.0339

(0.0123) (0.0143) (0.0210)2.0 to 2.5 miles -0.00501 -0.0191 -0.0231

(0.0103) (0.0120) (0.0181)

NE Results: Illustrative Marginal Effects

Assume value of $250,000 Categorical model (3 miles to NWR, 8 miles to

UA): Adjacent houses are valued $9,125 higher

than those 2.5 - 3.0 miles away. Continuous Model (3 miles to NWR, 8 miles to

UA): Moving house from 0.25 to 1.25 miles

decreases value by $10,775

Summary

NWRs appear to provide amenity values as expected

Amenity impact is highly localized (≤0.5 miles). Census track or even block-group data may not be refined enough to identify impacts. Access to block-level data important.

Amenity value tends to be higher for homes closer to densely populated area

Policy Implications

Programmatic approach to benefits estimation

Transactions data not available and case-study approach can be difficult for agencies to apply broadly in their programs

Additional tax revenue from (particular) NWR

Calculate average capitalized value across all homes

Using average acres per home, find average increase in tax revenue per acre

Policy Implications: Total Capitalized Value for Homes within 8 miles NE: Total Capitalized Benefits of $55

million across 9 NWRs Annual tax revenue increase of $69 per acre

SE: Total Capitalized Benefits of $100 million across 21 NWRs

Annual tax revenue increase of $40 per acre

Thank You

Questions? Comments?